Why Should We Care?

I just got an email from a reporter asking me why indies are fighting for lower priced ebooks. I’ve seen many indies ask each other the same thing. After all, affordable pricing is one of our biggest advantages. Why would we want that to go away?

What I find interesting about this question is the insight it provides about the people doing the asking. It would never occur to me to question another person’s willingness to perform selfless acts. I’m far more curious (and wary) of those who seem to think this is alien behavior. Maybe there is a lot of projection going on here. I don’t know.

What I do know is that this shouldn’t be a conundrum at all. Go look at the KBoards’ Writers’ Cafe. It is a free-for-all of helpful advice, of authors sharing their tips and secrets with as many other authors as possible. Many of us don’t see our fellow writers as competition. We see them as colleagues and comrades. A good book helps sell more good books. A rising tide lifts all ships.

My private worry is that reading will decline overall because of a pricing strategy motivated by viewing titles and formats as competition to one another. Publishers view backlist as competition to frontlist, which is crazy. They view debuting authors as competition to established authors, which is also crazy.

Have I advocated for cheaper ebooks? Hell, I’ve advocated for free ebooks. I think the ebook edition should come free with the purchase of the hardback. Blu-Rays often come with a download code for the digital edition. Why don’t bookstores partner with publishers and try to take away Amazon’s market share by offering a free ebook with every in-store purchase of the hardback? Give back to bookstores. Be generous to readers. It’s a win-win-win.

What publishers are doing today is harmful not just to their own bottom line, but to their authors, and to their readers. I advocate for all of these groups, because I want reading to flourish.

There are other things to consider when it comes to ebook pricing, beyond the cost of editorial and all that jazz. There are psychological costs associated with print books that are not associated with ebooks. For instance, bulk and weight. People will load up on ebooks before a vacation and only read one of the books, but they won’t regret the other purchases, because they were buying variety and diversity. They were hedging their fear of not having something great to read while they were on the road. Pricing ebooks lower increases the amount of digital hoarding readers do, which spreads the wealth around and does not diminish the enjoyment readers take from their hobby.

Likewise, ebooks don’t clutter homes and make people feel guilty for all the books they haven’t yet read. They don’t stare readers in the face, reminding them they are out of the market for their next read. Publishers can sell a lot of ebooks without triggering this TBR guilt. The economics here are just different. I poll readers everywhere I go, and these differences are apparent. There’s a strong market for affordable ebooks for reasons the bean counters at publishing houses simply can’t surmise. This is part of the reason that indies have taken such a large portion of market share in a short period of time.

Because there are authors involved, of course. I met an author at RWA who was leaving Hachette because she couldn’t convince her editor to lower her ebook from $9.99 to $4.99, where she knew she could gain more traction. Authors sign on with publishers because they erroneously believe the publisher shares their goal, which is to sell as many books as possible and maximize earnings. But publishers also have as goals the protection of their print relationships and the protection of sales for their A-List authors (so they hit certain bestseller lists). They see that debuting RWA author as competition. Who is going to stick up for those authors if they are unable to because of fear of reprisal?

Here’s a question for you: Where were the traditionally published authors when Amazon imprint authors were blacklisted from brick and mortar stores? And where was the outrage when Simon & Schuster authors were kept out of Barnes & Noble bookstores? There was none. There hasn’t been any. Why do indies do all the fighting? One possibility is that we are free to. No one can take anything from us. We are in the rare position of being beyond the reach of those who might harm our careers. The question for me isn’t why we fight for our fellow authors, but why anyone thinks this is strange.

Getting back to the projection idea, expecting others to act only in their self-interest says far more about the people asking that question than the other way around. Whoever is out there expecting people to only be selfish and to maximize their own earnings are the people I’m curious about. What drives them? What a weird way to look at the world. What a sad way to look at the world.

I’m going to keep fighting for authors and readers because I value both sets of people. And I don’t care what kinds of books they read or how they publish. I just care that we, as a culture, do a whole lot of both.

I have no opinion on the price of ebooks as an indie writer. As an indie writer, if there’s a successful strategy that lets you sell books at $100 a pop and still sell loads and loads and loads you officially have my interest.

As a reader, the idea of an ebook being priced the same as a paperback pisses me off. Royally.

In general, it’s been my experience that indie authors are passionate about the publishing industry for many reasons, with pricing being not even particularly high on the list. Speaking just for myself, I distrust cartels and other abuses of market power, and in this regard the Big Five (why are they even called that, if they don’t have more in common than they do in competition? Ask the Seven Sisters…) have a deplorable record. Life-of-copyright terms… anti-competition provisions… twice-a-year payment… a complete lack of innovation… you don’t get behavior like this in the absence of lopsided market power and abuse thereof.

I’ve managed to get back the rights to all my previously legacy-published titles, and am now only Amazon-published and self-published. So whatever Hachette or one of the other Big Five does is unlikely to have too much of an impact on my bottom line (though I do think, per the argument you’ve excerpted in your post, the book market would be bigger if books cost less). But because I care passionately about books, readers, reading, and authors, I still want to see publishing evolve, and therefore oppose reactionaries like James Patterson, Douglas Preston, Richard Russo, and Scott Turow, who are intent on preserving the legacy industry rather than on improving it (doubt me? Name one thing any one of them has done that would *change* publishing, as opposed to all the things they’ve done in favor of *preventing* any change).

For anyone having trouble with the concept that indie authors might care passionately about publishing even apart of their own bottom lines, I have to ask: why are you unable to imagine a set of motivations that’s other than fundamentally self-centered? Is it possible you’re sensing your own typical motivations and imagining that everyone else functions within the same limitations?

It’s an extreme example, granted, but I was fascinated to watch this dynamic play out with establishment reactions to Edward Snowden’s revelations. He must be a spy for Russia! A spy for China! A spy for both! A narcissist! An attention-seeker! Etc, etc, with not a single establishment pundit managing to raise — even for the sake of argument! — that there are times people are more motivated by altruism than they are by selfishness.

Something similar might be playing out here. Legacy publishers aren’t trying to preserve the position of paper because doing so is good for books, readers, and reading (unless you want to argue that windowing and high prices are appropriate means for achieving for such aims). They’re trying to preserve paper because paper is the historical foundation of their domination of publishing. It would be only human to assume other people must be similarly selfishly motivated. But it wouldn’t necessarily be correct.

Your last paragraph struck a note with me. There are clearly two mindsets at work in the Amazon/Hachette situation, and I think their intersection is a critical point in publishing history.

One aspect of Amazon’s initial public statement about e-book pricing as the sticking point in negotiations that jumped out at me was their willingness to toss out those numbers. Did they support them with verifiable data sets? No. Does that make the data less credible? Perhaps. It doesn’t make it less reliable, though. Amazon stepped outside its normal practice to share those data, and I don’t think they were presenting false data or spinning it to be anything other than what it was. What it SHOWED me about Amazon’s mindset is that the company is looking at pricing data, thinking about what works in today’s digital reading market, and putting analytical/research dollars into figuring out how to grow that market. That kind of commitment is a mindset of innovation.

Your point about legacy publishers “trying to preserve paper because paper is the historical foundation of their domination of publishing” is well made. That preservation attempt is apparent in something else you called out offhandedly, but which is extemely revealing about legacy publishing’s mindset: “unless you want to argue that windowing and high prices are appropriate means for achieving … such aims.” The fact that legacy publishing ISN’T offering data on how windowing and high prices are good for books, readers, and reading suggests they aren’t researching pricing strategies, aren’t thinking about what works in today’s digital reading market, and aren’t putting analytical/research dollars into figuring out how to grow that market. They don’t have the mindset of innovators. Their actions (and lack thereof) illustrate a mindset of stasis.

When innovation meets stasis, the latter is never the winner in the long run. The critical point of change happens when someone proves innovation achieves a specific goal and is the surest course, the one that provides the most benefit to the most people. At that point, anything static is about to be in dire straits.

If legacy publishing had a dram of innovation left in it, it might consider working WITH an innovative partner to uncover an as-yet-considered innovation that’s good for readers, authors, publishers, libraries, and retailers. I’m stubborn. I don’t believe that can’t be done. What I’m seeing, sadly, is that it’s NOT being done.

I always have some questions about this: How many people who want the hardcover would still buy the hardcovers even if the paperback and/or a reasonably priced ebook was released at the same time? And on the other side, how many people who do not care about the hardcover get discouraged when they don’t see the book for a reasonable price and so never buy the damn thing ever?

What if these two groups actually cancel each other out, and the publishers would sell just as many hardcovers and more paperbacks and more fairly priced ebooks if they released them all at the same time? Or what if they could make more overall by releasing them all at once with a smaller print run of hardcovers? Reminds me of the old story about the family who always cut the ends off of the ham before baking it on Easter, until the youngest daughter asked why. The mom did not know, so she asked the grandmother. Grandma did not know so they asked the great-grandmother and she said that back in the day, her oven was so small she had to cut off the ends to fit the ham in the oven.

Are publishers wasting ham for no good reason other than, “That is the way we have always done it?”

It’s not as simple as that for the publisher though. You have to remember the underlying reason that the Big 5 has such a stranglehold on the paper market is because of their relationship with paper distributors. If they suddenly start throwing their efforts into maxing out ebook revenue and paying less attention to their paper sales the bookstores and book distributors will not just roll over and let them. No, they will feel the publisher has turned their back on them so they will do the same. They’ll start carrying Amazon published books and maybe even print on demand and start making big 5 published books actually have to compete in the paper market. Sure they are trying to protect their paper sales, but what they are really trying to protect is the loyalty and relationship they have with the paper distributors, even if it means losing out on some ebook sales now.

Thanks for that perspective, it is a part of this, I had not considered or at least fully understood. I have often heard that publishers are trying to protect their paper sales, but this is clearer: they are trying to protect their somewhat exclusive access to the paper market, probably even if it hurts their paper sales as well as their ebook sales. Ironically, when they price ebooks very high to protect their exclusive access to the paper market by slowing down the adoption of ebooks, they may also speed up the adoption of ebooks by other readers. If someone gets too frustrated with the whole pricing structure of the traditional publishers, they may just stop shopping for new paper books altogether and simply limit their purchases to used paper books and reasonably priced ebooks (in fact I have read many comments suggesting people are doing just that). The publishers may be like someone in a flood trying desperately to stop water from coming in their front door without noticing that the water is already pouring in the back door.

It does seem the publishers are focused more on their relationship with distributors and bookstores than with their actual customers: readers. This creates all kinds of distortions in their business model, and requires them to resort to convuluted logic and strategies to try and keep all of this going even when their actual customers end up dissatisfied, and they lose sales as a result at the same time they protect their relationships with the middlemen.

It really does seem like they need to reinvent their business model, or else some new innovative company will come along and out compete them….oh wait that is already happening with Amazon! But it also seems like there is a big opening here for small to medium publishers that can change their business practices more quickly to take advantage of the new opportunities. I am sure that is already happening also. And just like independent bookstores have actually benefited the most from Border’s demise, maybe there will be some small and medium sized publishers who can really benefit along with self-published authors.

You touched on a key point, but I think you missed it by just a bit. You said, “It does seem the publishers are focused more on their relationship with distributors and bookstores than with their actual customers: readers.” That is true, but the truth hidden in this statement is that a publishers actual customers are the distributors and bookstores. That is who they actually sell their books to. The bookstore then sells it through to the reader. So indirectly, yes the reader is the ultimate customer, but from the publishers perspective, their “actual” customer, and the ones they care about the most, are the distributors and the bookstores. If you think of it that way, their motivations start to become a little more clear.

Good point. It does make clearer their perspective, but I still think they are ultimately are missing an important point when they do things that are good for their relationship with their bookstores and distributors but that also harm their indirect relationship with readers.

I thought about this some more, and I could not think of any other industry where you would call the store the customer. I am pretty sure Levi’s does not think of the clothing stores as their customer. And even automakers who have their dedicated stores or dealerships do not think of their customer as the dealership. Their customer is the person driving home in a new Mustang.

If publishers really think this way, then they have lost touch with the truth of who their customer is.

Too messy. That’s why they switched to tarot cards, but only after 350 years of the tarot being “a game.” (Quickie history lesson: Tarot invented in northern Italy circa 1438 – becomes INSANELY popular “oooh! Look! cards with pictures!” and sailors and merchants all over had a new pastime. It was in 1790 some French guy (an ancestor of Hachette founders perhaps? called himself a “tarot reader”).

“Oh my god! What is your point man?”

This isn’t the first time that the publishing industry failed to innovate. People (in business) get stuck on what works, what is safe, and what is predictable. After all, there is money involved (other people’s and how to get it

Hopefully it won’t take the French another 350 years to get with the program this time.

I admit with all the back and forth on this issue, I was just getting sick of the whole thing and not really caring anymore. Everyone was starting to come off poorly. This post helped me to put things back in perspective. Thank you.

When I asked you about your willingness to promote other authors and you said ” I love to promote other authors.”, it made me appreciate you and your work that much more! Kudos to you for not competing but viewing others as colleagues. I’ll keep reading as long as you keep writing. On a side note, Promises of London was powerful, and put me right into the words you wrote. Fantastic short story!!
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While I tend to agree with Amazon about ebook prices, I don’t really think it’s their right to force this pricing scheme on publishers. That’s not really what retailers should be doing, trying to police prices charged by suppliers. They should be free to discount from the wholesale price as they see fit, but if that wholesale price is set at a higher level because the publisher has other concerns and interests, that’s their business.

If publishers are wrong about pricing – and I think they are – the market will punish them for that. Publishers who price their books more reasonably will have a big opportunity to profit here. I wouldn’t be surprised if one of the Big Five takes advantage of that. If none do, at least self-publishers will continue to have a big advantage. So it’s a win all around.

It does concern me that high prices will further marginalize reading, and tend to make it into a pricey, elitist form of entertainment more for niche audiences than the mainstream. But that’s where self-publishers can come in and take over. As they already seem to be doing quite well with lower prices. Who can really complain about that other than the authors who signed away their rights to these myopic publishers?

While I tend to agree with Amazon about ebook prices, I don’t really think it’s their right to force this pricing scheme on publishers. That’s not really what retailers should be doing, trying to police prices charged by suppliers.

Of course that is what retailers should be doing. It happens millions of times a day all over the place. Retailers and suppliers negotiate prices for the suppliers goods. It is a never ending process. If they come to agreement, they have a deal. If they don’t come to agreement, they don’t have a deal. It is normal business practice.

Rights have nothing to do with it. Each party obviously has rights to their own stuff. They decide if they will trade their stuff.

I wish everyone would stop using concepts like force, coercion, captive audiences, and the like in these discussions. They have no place in the free marketplace, where all of the players are making voluntary choices about the use and disposal of their own goods and services. No one has a gun to anyone’s head.

The only exception to this involves the entry of government (i.e., legal compulsion) into the equation, via antitrust and tax policy. I don’t want business negotiations to become playthings of politicians and special-interest definitions of “the public good.” The public freely determines its own “good” every time it makes voluntary transactions. The marketplace is the ultimate democracy, where we all “vote with our dollars” for what we want, and withhold our dollar “votes” from the things we don’t want.

I believe Amazon is on the side of common sense and progress in its disputes with Hachette and the other minions of Big Publishing. LIke many of you here, I’ve benefited, in life-changing ways, from Amazon’s self-publishing program. But I don’t support the fact that the government intervened against the publishers and Apple to stop them from setting prices and terms for their own stuff. If they had chosen to “collude” to set the price of ebooks at $50 or $500 per copy — well, it would have been their funeral in the marketplace. Book customers would have moved toward indies, and toward other forms of entertainment, in droves, crushing the “conspirators” for their arrogance and stupidity. To a great extent, that is happening anyway.

To sum up: What Amazon and Hachette decide in their negotiations does not involve improper force or coercion. Either side is free to reject terms it finds onerous. Neither side has a right — a legal entitlement — to the goods and services owned by the other, unless they can agree on terms of trade.

I hope Big Publishing comes to its senses, for the reasons that Hugh states. It would benefit readers, writers, and the entire book industry if publishers embraced progress rather than trying to retard it. But whether or not they do, ebooks, online retailing, and self-publishing are waves of the future. If they refuse to learn to surf those waves, they’ll go under.

I wish everyone would stop using concepts like force, coercion, captive audiences, and the like in these discussions. They have no place in the free marketplace, where all of the players are making voluntary choices about the use and disposal of their own goods and services. No one has a gun to anyone’s head.

These terms are being used in inflammatory ways and as part of propaganda, and should be recognized as such, but they are not entirely inappropriate.

There is and has been collusion, coercion and price fixing going on in the publishing industry so terms like coercion and force and captive audience are not inappropriate.

The Big 5 act as a de facto cartel through their almost identical contract terms with authors and distributors and retailers. Amazon had huge eBook and etailer market share and the power that went along with it — enough that the Big 5 were afraid for their position of power over the industry and sought to take Amazon down by colluding with Apple and each other over Agency.

The book publishing cartel is deliberately trying to prevent Amazonian innovation and stymie technological change, raising prices on eBooks, taking a bigger share of the pie, benefitting themselves and the few mega-bestsellers at the expense of the majority of authors who suffer under unconscionable contracts and terms. They have been able to do this because of their ability to act as a cartel. Clearly, they and a few of their blockbuster authors benefit on the backs of the many and most of their authors are not able to respond. If that isn’t a relationship of power, if there isn’t coercion and captivity involved, I don’t know if we understand the words in the same way.

Yes, no one has the “right” by law to force a retailer to sell goods nor are suppliers “required” by law to sell through a particular retailer — this is a (relatively) free market after all. That being said, this ignores the reality that Amazon is “it”. If you want to sell books, you must sell on Amazon. B&N and Apple and Kobo together don’t add up to Amazon when it comes to ability to reach consumers. Amazon has a lot of power because of its market share. The reality is that the Big 5 “have” to sell on Amazon because there is no viable alternative. It is so big, if you don’t sell on Amazon, you might as well not exist. Yes, there are a few outliers who make more on B&N than Amazon, but they prove the rule.

That’s a lot of power and should be recognized as such.

I don’t bemoan the power that Amazon has. I think it has that power because it does what it does better than anyone else and the market — consumers — are rewarding Amazon for it. They have earned that market share. Amazon is good for consumers and I think it will be good for authors in the long run as the Big 5 become less and less necessary. But I don’t for a moment think that Amazon is somehow beneficent and altruistic. It is disrupting the old way of doing business with a new more efficient and cost-effective and consumer friendly model. It does so because it has figured out the formula for success in this new digital marketplace.

People who shrug about that power and dismiss the potential for abuse are just as wrong as those who claim that Amazon means the end of the world.

Anon, you make some excellent points and I agree with everything except for one thing: there is every reason for Amazon to be beneficial to consumers but there are very few reasons why they should worry about authors, in particular indies. Last time I checked, there were nearly 3.4 million titles in the Kindle Store (you can check too if you’re an Amazon Associate) and Amazon thus can be considered to have a “well-stocked” store. NO reason to search for new authors or new books or worry about giving indies special attractive rates like the current 70% royalty for books between $2.99 and $9.99. In fact, Amazon has to respond to Wall Street and investors are worried it’s not making enough profits. The next thing to go could very well be that 70% royalty…

Indeed, do we know what Amazon and Hachette are really debating? What’s the disagreement all about? We don’t really know, we can only surmise. And I suspect that the fight is about the share of the pie: Amazon as a retailer has been very generous so far mainly because they were more interested in gaining market share than in making top money. Now that they’ve earned that big market share they wanted, their next objective is to turn in a profit. And they started with one of the Big 5 because that sets a precedent. Makes sense.

So indies should expect their share of the pie to come down too at some point in the not too distant future. I know that this is bad news but I think it’s not helpful to close our eyes on reality.

This said, I think Hugh Howey’s piece is excellent and well-balanced. It’s nice to read the stuff from someone who is genuinely concerned about readers and our culture (as I am).

I disagree that’s it’s a retailer’s business to try to set overall industry prices according to their own sense of how suppliers should operate. They can certainly negotiate for lower prices, and refuse to carry items that they don’t think can compete, but let’s face it, that’s not the actual issue here. Amazon wants to set some pretty rigid limits on ebook pricing. They are even worse with self-publishers, and I have to say, I don’t like that either. There’s no legitimate reason why Amazon should limit their 70% KDP royalty to books priced within the 2.99-9.99 range. I think it’s great as a suggestion, but not as an actual limit, with anything outside that range only paying 35%. Absurd, to be honest, and I can’t imagine any self-respecting self-pubber who would disagree. Apple, B&N, Kobo, Smashwords, and every other eretailer has no limits on their top royalty. So I don’t see why Amazon should. Let publishers and self-publishers decide for themselves what they want to price their books at. Amazon should of course lobby and try to convince publishers that it’s in their own best interests to lower prices, but if it isn’t, or even if they mistakenly believe it isn’t, Amazon should let them suffer the consequences of overpricing their products.

I think you have to remember that books really aren’t interchangeable widgets, such that a retailer would only carry the best-priced items, and ignore the rest. Amazon’s business model has been to carry all the books they possibly can, from all publishers, at all prices. That’s been very successful. If they are going to change that model to only carry books within a certain price range, that’s their business, but I think it’s stupid. And using a scalable royalty/margin system that punishes books that are priced outside that range is I think a bad idea. Let the marketplace decide where the best price points are. Amazon can publish that kind of marketing information to let people know where they think the best price points are, but to enforce those ideas about price as if anything other than what Amazon thinks is right must be punished with lower margins, is the one issue in this whole negotiation with Hachette that rubs me the wrong way. I also think Hachette’s demands for agency pricing are stupid, and that Amazon should be free to discount their wholesale prices as much as they like, but even with a wholesale model, publishers should be free to set their own prices, and be paid the same margin rate on all books regardless of price (which I think is one of the major stumbling points in the negotiations).

I understand Amazon’s logic and intentions, but frankly some of what they are trying to do isn’t justifiable. It’s of course their “right” to make demands on publishers to get better deals and increase their own profits, but I really can’t see how in the book industry a retailer can demand the right to set overall price limits on ebooks, or limits on the margins based on overall prices. Those publishers who fail to set their prices according to the market will suffer, and those who price properly will thrive, and Amazon should let that winnowing out process rule. But when Amazon steps in and tries to tell everyone what the market is, and what prices they will allow, they are overstepping their bounds. And in that respect Hachette, the Big Five, and even every self-publisher should have an open field in which to set their prices, and not be limited to the range of 2.99-9.99 that Amazon has artificially decided the market should be at.

“While I tend to agree with Amazon about ebook prices, I don’t really think it’s their right to force this pricing scheme on publishers. That’s not really what retailers should be doing, trying to police prices charged by suppliers. They should be free to discount from the wholesale price as they see fit, but if that wholesale price is set at a higher level because the publisher has other concerns and interests, that’s their business.”

Walmart doesn’t try to carry every book that is published, they only carry a small selection of the best-selling books (for their demographic). When Walmart negotiates with suppliers, it is well-established that their suppliers can be completely replaced by a competitor if they don’t get the prices they want. But that same principle doesn’t hold true with books or the publishing industry as a whole.

Amazon’s book retailing business doesn’t operate that way in any case. They don’t negotiate with Hachette by saying, hey, we can replace your books with Random House’s if you don’t lower your prices. Books are not interchangeable commodities whose only difference lies in price. Amazon want to carry Hachette’s books no matter what, and no one else can sell them Hachette’s books but Hachette. Because Hachette has a monopoly on their own books. And Amazon’s business model is to carry all books by all publishers and authors. If Amazon were to suddenly decide that no, they don’t want to carry all books, but only books by publishers who agree to their pricing models, that’s of course their business, but it would destroy the model they built their whole business on, and it would severely weaken their hold on book retailing.

So the situation is that Amazon wants to have their cake and eat it. They want to carry every book by every publisher, but also dictate the wholesale pricing and margins. That just doesn’t work. If the only hold they have over publishers is the threat not to carry their books, it only takes a few of the major publishers calling that bluff to break Amazon. Because in the end, Amazon needs to carry every book by every publisher, and they know that. They can punish Hachette, but they can’t actually stop carrying their books, and they definitely can’t do that with all the Big Five

Walmart doesn’t pretend to carry every possible item by every manufacturer, with books or anything else. They only carry the ones they get the best deals from. So they can bully suppliers on price, but Amazon can’t bully publishers in that manner. They can of course negotiate as best they can, and they do have considerable clout, but they don’t really have the option of cutting off major publishers. So they basically have to end up paying whatever wholesale price the publishers give them, and mark it up or discount it as they see fit, and if the publisher insists on agency pricing, their only real option is the DOJ doing another collusion suit. But I think the big publishers’ lawyers are smart enough to stage these negotiations in a manner that skirts those laws.

So basically I see Amazon backing down at some point. Not because of all the bad publicity, but because their all-inclusive business model in the end is more important to their bottom line than being able to dictate ebook pricing. Amazon wants to be, and maybe is, the public utility of publishing at this point. But that comes at a price. Once you become a public utility that tries to serve everyone, you can’t start excluding and dictating terms to everyone. If your business model depends on you carrying all books, you are stuck having to accept all publisher’s pricing. Sure, you should be able to discount, but even that may not be possible to insist upon. Being able to do that requires that publishers themselves see the folly of that model, and the smarter ones opting out.

The one thing that your analysis leaves out is that Hachette is the first of the Big Five to be eligible to renegotiate terms with Amazon. If Amazon caves in, then the other four big publishers will demand the same terms – and Amazon will have permanently lost the right to set its own retail prices. I suspect they would rather exit the bookselling business altogether than concede that.

I’m glad you responded on your blog to my query. I’ll include your thoughts in my post (editing after I post this).

But I’d like to respond to something you wrote: “What I find interesting about this question is the insight it provides about the people doing the asking. It would never occur to me to question another person’s willingness to perform selfless acts.”

First off, I never thinking asking questions is wrong, no matter what they are. And I have no problem ever admitting I don’t understand something and want it explained. Second, and the reason I wanted to respond to this, is that questioning supposed selfless acts is reporting 101. Questioning why people do anything is just the basics for journalism.

I would encourage everyone who wants to think critically about an issue to think about all its aspects, even its sacred cows.

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So let me explain what I mean by that term. In politics, our journalists believe, it is better to be savvy than it is to be honest or correct on the facts. It’s better to be savvy than it is to be just, good, fair, decent, strictly lawful, civilized, sincere, thoughtful or humane. Savviness is what journalists admire in others. Savvy is what they themselves dearly wish to be. (And to be unsavvy is far worse than being wrong.)
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As a die-hard skeptic myself, I understand your encouragement for people to think critically and to question everything, even sacred cows.

In the case of most indie authors, questioning the sacred cows is exactly why we’re self-publishing now and not lining up to try to do it the industry-sanctioned way.

If you don’t believe me, just look at the way the media portrays self-publishing versus “real” publishing. You’d have to be crazy to think that the Big Five aren’t the largest sacred cow in this entire game.

I applaud what you’re doing and the fact that you can do it warms my heart. I’ll repeat for you here what I’ve said on NPR multiple times, on other national media outlets, on Digital Book World, in front of live audiences and to anyone who will listen:

“The democratization of access to wide audiences is one of the greatest developments of our time in book publishing. It personally heartens me to see people who wouldn’t have before have the opportunity to publish books. For many authors, based on my many conversations with them and our surveys of thousands of them, the ability to bring a book into the world and share it with even a few people is a dream come true. The fact that some people are making a killing doing so is wonderful; and the fact that a few more are paying bills with their work is even more amazing.”

If you go back and read my reporting, opinion pieces and such, you’ll see this is consistent. The fact that I also report about publishers, including the “big five” and so many others, bringing in record revenues and profits in the age of ebooks I think makes some people upset. I’m not entirely sure why.

That said, as much as I can, I’m on the sidelines cheering on you and the hundreds of thousands of other authors who are publishing without a “traditional” publisher.

Even for those who see fellow authors of competition, encouraging lower e-book prices for everyone can make sense, because the market will change anyway. What’s better, to be on the forefront of market change and therefore in a good position to morph with it, or to be blindsided by it and therefore having to react to even catch up?

Isn’t a failure to stay relevant and innovative what’s plaguing the major publishers now?

I was surprised at the vitriol on the Kboards regarding Amazon’s request. Okay, their request surprised me too, but that’s beside the point.

I’ve seen the “go ahead and let the Big 5 price their stuff high, who cares?” meme more and more. I understand the sentiment, but we needn’t fear lower prices from them. Indies will still be lower priced in the market. Big publishing physically can’t bring their prices down to compete with us, except for very special, limited time promotions. Their overhead is just too high.

Look at it this way. If you see two similar products in the store, and one is priced at $14.99 while the other is $3.99, how are you going to perceive the two? Personally, I’d look at the lower priced one and figure it’s probably poorly made. On the other hand, if the two prices are 9.99 and 3.99, I might think the lower priced one is just a good deal. The difference isn’t too large to make me think something fishy’s going on.

“Here’s a question for you: Where were the traditionally published authors when Amazon imprint authors were blacklisted from brick and mortar stores?”

Because most people can’t separate Little Amazon (the publishing division) from Big Amazon (the retailer). And Big Amazon has encouraged Kindle owners to go into physical bookstores and use them as showrooms. What was the first thing Bezos demonstrated the Firefly app on? A physical book, of course. Some see that as predatory. I just see it as douche-baggery on the part of Big Amazon. And that shit rolls downhill, unfortunately leaving a Big Amazon skid-mark on Little Amazon authors and some bookstore owners can’t stand the smell.

So: Screw the authors. They made a mistake when they signed with Amazon. I see a lot of people saying this about authors who signed with Hachette. And I certainly felt like an idiot for signing with S&S when they couldn’t get my book into B&N. I just don’t have whatever callousness is required to feel this way.

I feel bad for authors who can’t get their books in front of readers, no matter who they are. (Okay, fuck James Patterson. I don’t care about him, but literally, EVERYONE else).

In the current publishing quagmire, there’s no way in hell I would sign with Little A for the reasons I stated above. I don’t like it, but I can’t blame bookstore owners for feeling the way they do about Big Amazon. They have a right to their outrage. It’s valid. Bezos IS encouraging Kindle owners to showroom their stores and not buy from them. I’d be pissed too if I was a bookstore owner, wouldn’t you?

Dude, you didn’t own the bookstore you worked in. You weren’t paying the overhead. Huge difference. And wasn’t it a trade bookstore, or campus bookstore or something? Another huge difference. (Or maybe I heard wrong?)

I’ve visited 200+ indie stores and they all bemoan Amazon for obvious reasons.

So…why are you so callous to their concerns? Or is it the Bezos line of, “Amazon isn’t doing this to them, the Future is doing this to them.” So screw the mom and pop stores, they’re old, slow, euthanize the lot of them and turn them into something useful, like Soylent Green…

Seriously though, in this mad utopia you speak of, how do you think showrooming will help your bookstore?

I think if you embrace showrooming, the same people who already do it will do it, but everyone else will spend more at the store to support you. There are some semi-related studies that back this up (mostly having to do with stealing petrified wood from national parks).

Indie bookshops are out of their minds to lament Amazon. Amazon is saving indie stores by putting the real competition, B&N/Borders/BAM out of business. I’ve blogged why this is several times if you want to go look for it.

Independent bookstores (many of them, anyway) are doing just fine. Recovering from the former scourge of the big chains… the late Borders and the still-struggling-along B&N. That personal touch, homey atmosphere, and the ability to become a community center (readings, music, cafe) are what will set them apart from cookie-cutter chains and online purchasing.

But seriously… can you imagine anything stopping the steamroller that is Amazon? Not simply Amazon (which created the market and the device that brought ebooks to the people) but ANY company that offered this new technology. It’s going to be the future of reading. And it someday will have another name. Some outfit will come along and displace Amazon, as always happens eventually. But the convenience, the price, the resource savings (dead trees, fossil fuel to ship the books, huge warehouses to store them) all mean that ebooks and ereaders are the inevitable FUTURE of reading.

I’m really proud to be an indie author who is part of this new paradigm. I think it’s absolutely the better way to go, for both writers and readers, and I don’t think going into a bookstore and looking at books before buying them online has any significance at all in the big picture.

P.S. Loved your “Hotel on the Corner of Bitter and Sweet.” Read it back when I followed Nathan Bransford’s blog.

Showrooming gets people into the store where they may decide to just skip Amazon and buy right there, or they might buy something else.

I’m not saying it’s necessarily the same, but when the market changes people need to adapt to the new market. Hugh is making lemonade — as we all should. In his case, it’s probably going to be excellent lemonade, too.

I agree with Hugh on this. Have you seen the list of folks who can’t get into bookstores, including a whole slew of indie bookstores because they won’t “support” Amazon in any way? It staggering the talent…including those who have penned classics…that is being kept from the browsing public because of spite.

When I see that, I feel terrible for them. And when I see the mid and debut authors at Hachette who are trapped between two goliaths and probably afraid to speak their mind, I feel terrible for them.

Hugh, it’s just proof the both chain and independent bookstores hate authors, and see them as wage slaves who only have a right to publish and be sold if they work for the right sort of plantation owner. So long as authors agree to live and work at their assigned plantations and follow the rules set by their owners, all is well. But they are ready to whip out the lash on any authors who stray off the reservation and work for better wages at a more equitable plantation. Even worse, if they work for themselves.

So Amazon invented showrooming? Hardly. This is something that was happening anyway, with or without Amazon. They just have the foresight to come up with a way to make it easier for customer’s to do something they are going to do anyway.

And really, what is showrooming at it’s core? It’s just shopping for the best price. Are all the coupon clippers of the world who do research and find the best prices on the products they are going to buy douche bags as well or just smart consumers? You have to remember that although Amazon is providing the way, it is consumers who are speaking with their dollars about what they want. If consumers want Indie bookstores to survive, they will regardless of what Amazon does.

Big corporations in a capitalist society are always going to do what’s best for the bottom line. Is that evil? Is the lion evil for picking out the weakest of the herd, hunting it down and consuming it or is it just doing what a lion is built to do?

Hugh is for the authors and the readers. Right now Amazon is treating authors leaps and bounds better than others so he’s temporarily aligned with Amazon. He cares about this fight between two mega corporations, not because he is rooting for one to win over the other. He is rooting for writers and readers to win. He is merely pointing out that it is a bit ironic that some are shocked that he cares so much when he is as equally shocked that they could care so little. The examples he pointed out, A-Pubbed authors not allowed in bookstores, etc, were merely to point out some of the callous attitudes people throw around. Those attitudes should be shocking, not Hugh’s positivity.

Showrooming can cut both ways. For example, when shopping for big ticket items, I often go to Amazon first to showroom and see what’s out there, what gets the best reviews, etc. Then I got out into the web to find the best prices, and buy elsewhere. Amazon doesn’t often have the best prices on a lot of big ticket items. But they have a huge selection, and their site makes for a great showroom. I assume they know this happens.

You see that as shitbaggery? I see that as what we consumers have been doing already, and the app just made it easier.

My hubby always pulls out the iPhone, and has for YEARS, to check prices online (particularly Amazon) at bookstores (when we used to go regularly, but haven’t been there since Dec 2012 on a book jaunt). Whether it’s Best Buy or B&N, he checks to see if he can get it cheaper on Amazon. I would, too, if I didn’t dislike using smartphones and those tiny screens so much.

Bezos was demonstrating something Amazonphiles do all the time–made easier. Makes sense to me. Not douchebaggery: facing reality.

What would be cool is if a store put up a sign: If you see it on Amazon at a cheaper price, let us match it. Talk to us before NOT buying. Play the game.

Hugh, that’s so exactly right! This is what I sent to Michael Piestch today:

Dear Mr. Piestch,

When I received my first Kindle as a gift, I was delighted because I could now order two copies of all my favorite books, one for my Kindle and the other, a hardcover, for my home library. I love books! I keep buying bookshelves because I fill them full, but I also travel so I need a Kindle so I have plenty of reading material. Sometimes I would find a good book on my Kindle while out and about, then I would come home and order it in hardcover for my library.

To my dismay, I found that there is no deal to be had for buying both the hardcover and the e-book. The e-books from the major publishing houses are so expensive I had to choose between the e-book and the hardcover, so I gradually stopped buying the hardcovers. I e-mailed Amazon and asked them why they couldn’t bundle books and give me a deal, and they said they couldn’t.

I can’t buy both e-books and hardcovers because of you, and your your desire to keep people like me from reading e-books, when you could be making a lot of money for yourself. You’re not being smart. I’m not giving up reading, and if I had a choice I wouldn’t give up the glossy gorgeous heavy hardcovers that fill my library shelves. You are forcing me to choose e-books because I can’t afford both because of your unfair pricing.

Make a deal with Amazon. Start bundling hardcovers with a free e-book and you’ll see your sales soar. Stop punishing readers like myself in a mistaken belief that you can stop us from reading e-books. We won’t stop. But you can force us to stop buying hardcovers, and that’s what you’re doing. What a shame. I have room for more books in my library.

Back on the topic, though. I’m still confused at how the Big 5 can even think it is a good idea to price so high?

And if Zon gets 30 percent of the price they set and must *eat* all the discount they give to their readers, then who can blame them for not wanting to go that route and wanting to negotiate something less onerous on their bottom line? It would be like asking all those bookstores who proudly display the 35% discount on their hardcovers to eat the entire discount while the publishers gets the full amount based on list price. That doesn’t make sense so, of course they want to negotiate.

However it goes, I don’t think it’s good for anyone for it to keep dragging out and I hope it is settled soon. A not-very-nice part of me keeps watching the big authors say nasty things and the comments by bookstore owners who say very unpleasant things about self-pubbed authors and thinks, “Let them dig.”

But I’m not accused of being pollyanna about things for no reason and my better nature usually comes right back and wishes everyone would just see the situation with clarity and come to consensus so readers (and authors and bookstores) can all be happy.

I wrote Hugh an e-mail not long ago asking a similar question (“If I’m going to throw my novel, when finished, up on Amazon, how worried do I need to be about what’s going on with the publishing houses?” — I loved the auto-reply, by the way). I wasn’t asking the question because I have a “Well, I’ve got MY plan, to hell with the rest of you” attitude, but only for insight as to what the best e-publishing method would be for me, say six months from now. My loyalty will always be to the readers and the authors first, and Hugh’s blog helps reinforce that … these are just “interesting times” for first-time authors to be entering the world of self-publishing.

I’ve been a reader for much longer than I’ve been a writer. I’m not selfless in my opposition of Hachette’s demands to be able to set ebook prices high with low trade discounts that effectively stop retailers from reducing the inflated prices to more affordable prices for readers. Whatever the agreement is at the end of this dispute, I hope that readers get a fair deal.

Fabulous post, Eamon! You are a great supporter of indie writers, and we are lucky to have reviewers like you. I’m not surprised you have established personal relationships with a lot of self-published authors.

It’s great to see someone with a strong voice put out eloquent and clear reasoning of why we should care. I’ve seen some pretty selfish commentary by some indies, some of which has exuded quite a bit of bitterness, which has not only failed to persuade me to their arguments, but damaged their author brand to me as a reader.

Yeah, I’ve been very disappointed by some people I otherwise respect. A lot of selfish attitudes. I have a theory about this. I think people are generally nice when they are on the bottom rung and also when they have more than they’ll ever need. I think people can be assholes when they are in-between. There are evolutionary reasons, I think. If you look at behavior among pack animals, it seems to mimic what I’m seeing.

One of the authors who is taking the wrong stance on a lot of these issues once said to me, while discussing money and how it has changed our lives, “It isn’t like I’m in the tens of millions yet.” It shocked me. Made me realize that millions weren’t enough for this person. I think that’s why he can still be in the asshole zone, even though he has so much.

I’m working on the fine details of the theory. I’ve shared it with my wife, who had a lot to add and thinks I’m on to something (and she’s the brains of this outfit).

As for the Donald Sterling thing, a theme I like to work with goes against the “power corrupts” theme. I think that power does not corrupt, it just makes you more of what you already are. (Swamp Thing reference!)

People at the beginning of their journey have nothing to lose, and those at the top (or close to it) who can appreciate how far they have come are often pretty happy to share.

I saw one blog post the other day lecturing indies on how they should look at the Amazon email solely from a professional and business view point, yet the post was hysterical and emotional, with the author threatening to pull all of their titles from Amazon. The complete opposite of what they were trying to communicate.

Not only was their hypocritical rant unprofessional, but also full of potential to shoot themselves (and their readers) in the foot.

While the issue is about a publisher and a retailer the discussion should also consider readers, books and authors. And it needs to be a conversation based on facts and data, not emotional witch hunts or unjust claims of victimisation.

The email was a simple update on the situation from Amazon’s point of view with a request. It was pretty easy to either action, read and ignore or delete. Some of the hostility I have seen has been strange to my mind.

Love that. I doubt I’ll ever be in the tens of millions. But I’m pretty thrilled to be where I am… money-wise and otherwise.

The thing about money is… even when you get there (to the tens of millions or the big house or the height of society) you’re still you, with all your insecurities and bad habits and flat feet. What is it they say…?

I have a business relationship with Amazon and none with Hatchette. I also distribute through Barnes & Noble, Kobo, and iBooks. Amazon makes me a third of my income. They’re not changing the industry, but it is changing, and they’re not responsible for slowing that change so that the old-hands can pretend that they don’t need to adapt.

The market responds to reader and consumer behavior. It does not dictate it. It’s all about the reader. Always. Forget this and be crushed under the wheels of revolution.

In 1979, I was 15-years-old, had my allowance from mowing the lawn in my pocket, and I was looking for books to read. In front of me was a paperback with a cover featuring an impeccable image of some guy sitting on a white dragon. That book, “The White Dragon,” made me a dedicated fan of Anne McCaffrey for life. It also cost me $2.25—not a small percentage of what I had in my pocket. I had to pick and choose what books I was going to buy back then.

That same paperback book today costs $7.99. (Well, it did before Borders closed in my town.) That’s pretty expensive—slightly higher than the rate of inflation from 1979. More expensive than the 15-year-old me from 1979 could afford. I would have passed on the book, never knowing the wonders it contained.

I put my ebook at $4.99. My reasoning came about by trying to work out what book a 15-year-old could afford today based on the books I bought back then. I chose 15 because that was how old I was at the height of my book buying. Not long after, book prices suddenly shot up by $2 on average, forcing me to reduce my book-buying habit; and at the same time I made the wonderful discovery that girls found me as attractive as I found them and suddenly most of my allowance was being spent on other activities…

I used the US Gov. inflation calculator:

I compared what the books cost me back then to what they “should” be today, rounded off and came to $4.99.

Second:

Once the text has been edited and approved for production, an ebook has no further production costs. Unlike paper books which have material costs, warehousing, shipping, and other costs associated with physical goods. For this reason, I decided an ebook should not cost more than 70% the cost of the cheapest available physical book (to wit: a paperback). An average paperback is priced about $8. Seventy percent of that is roughly $5.60. Because the distributors want the price to end in “.99,” I rounded down and arrived at $4.99.

Honestly, self-published books have so little overhead that we self-published authors can charge far less that trad pubs and still make a good living if you have a book that sells well.

My best selling self-published books are priced at $4.99 and have sold 100K+ since last year. When I calculate the hours I put into writing, editing, formatting, and the cost of professional cover design and editing, and even add in several BookBub promotions, I am BLOWN AWAY at my hourly wage. The thing is, even a year after publishing the first book, I am still making money from it. This is the long tail of which folks speak and it is amazing. You can make good money as a self-published author if you get even a small bestseller. I added up all my costs and hours and made $500/hr writing and editing my books which is why I quit my day job where I earned $39/hr.

Self-publishing writers have suddenly become a significant part of the book selling industry. Where self-publishing was once considered a thing of shame, self-published books are now shoving traditionally published books off the bestsellers lists.

Traditional publishing is now facing the first real and significant competition it’s seen in decades—centuries, even. And that competition is coming from the very reserves that they created by trying to keep professional authors a scarce commodity. All those quality writers have turned to self-publishing and suddenly, readers are getting a much broader variety to choose from.

If there is one common thread to any legacy industry being threatened by change and innovative competitors, large companies tend to turn to protectionist tactics. And when that isn’t working, they throw legal hurdles against the competition and start calling them names. And when that still doesn’t work, they go out of business. Any company in any industry must change or die. Often the companies that are too big to fail are too big to change and end up failing anyway.

At the same time that we are seeing the rise of the independent writers, there is a growing industry of “independent publishers”: small publishing houses created by editors and managers disaffected and disapproving of how the big, legacy publishers are running things. These small publishing houses are offering the better terms and profit shares with authors, echoing suggested numbers that were recently posted online. They are more nimble than their larger competitors and can adjust to market changes almost overnight. Not every writer is savvy enough to deal with the business aspects of the book industry. So, such publishing houses will always be needed. And those that offer better terms to writers, will start stealing business away from those companies who refuse to change the way they have always done things.

And that will eventually force the industry to change in the long run, whether they want to or not.

In trying to separate my own immediate self-interest from the greater good, I’ve gone around and around about this issue.

I’m a hybrid author with decades of experience with traditional publishing. Early on I learned the difference between the major comics publishers who would own my work for a flat fee and the independents and underground publishers who let me own my work and who paid me a royalty based on sales.

I would have made much more money working for Marvel and DC on a work for hire basis than I’ve made as an independent. But I’m more comfortable with an arrangement that’s clean and simple: When I sell a book I get a royalty, the publisher gets a cut, the agent gets a cut, the retailer gets a cut. Each did a job, each gets a cut.

In figuring out, or trying to figure out, the Amazon vs. Hachette contest, I look at each party’s role. Who does what? Writer writes. Publisher publishes. Retailer sells to the public. So who sets the price?

In the olden days, the publisher set the wholesale price and the retailer set the retail price. With the “agency model” where the retailer is the publisher’s “agent” I have to think it’s up to the publisher to set the price.

Yes, the retailer may think they know better what the price ought to be, ON AVERAGE, but is that the right price in every case?

I believe that publishers should be able to set the price of their product. If the retailer wants to sell for less and sacrifice part of their percentage, okay. But we aren’t working under that model here.

I want what’s best for readers and authors and publishers, but I don’t think that any single part can or SHOULD make decisions for the others. I would hope that publishers would wise up to the value of lower eBook prices, and retailers can encourage that attitude, but I don’t think it’s the retailer’s place to FORCE those prices onto everyone else.

Amazon thinks I should RAISE the price of my $5.99 novels. They say I’ll make more money at a higher price point. They could be right. But I think it should be my decision to set the price, not Amazon’s. So I have to extend that courtesy to Hachette as well.

Is Amazon forcing you to set it at the price they suggested, or just suggesting?

If Hachette doesn’t want to sell at the price Amazon wants to buy, then they have no deal and they part ways. Isn’t that how it goes? If you disliked amazon’s price demands, you could leave and publish elsewhere, or create your own venue for sales.

Amazon has as much right to say, “We want this price point after discount, and we both take the initial hit,” as Hachette has to say, “We want this sale price and will not budge.” Who loses more by not capitulating? Who gains more by standing firm? That is the question here.

Overall, it is a matter of taking what Amazon offers or walking away. Amazon sets the royalty at various price points and I operate within that framework, which is $2.99 to $9.99 to earn the larger royalty. If I charge less than or more than that, my royalty is cut in half. There’s no logistical, physical reason for this structure. It’s just what Amazon does to encourage ebooks to be priced within the range they think is “right.”

They SUGGEST that I charge $6.99. They present me with a graph of sales of “books like mine” and show how my income would peak at the $6.99 point.

The problem is, exactly what are “books like mine”? Give me some titles. Show me the criteria. I have a feeling I’d be shocked.

Does Amazon know the demographic profile of my fan base? Does it understand how I’m shifting my career, changing media, tweaking the work itself? Do they know my long-term plan? No.

To Amazon, my books are four among millions. Amazon has the overall picture, like a satellite view, but they don’t have the depth of understanding of my books as individuals that I do, which I would expect a publisher to have of its individual books.

Yes, Amazon and Hachette can both walk away, but who does that benefit? No one, certainly not readers who enjoy Amazon’s shopping experience, and certainly not authors whose work would be less widely and handily available.

Better to figure out who is in charge of what and create a framework in which everyone works together.

Amazon can do A LOT to promote lower-priced ebooks through also-boughts and featured recommendations and placement of titles top-of-page. They don’t need to be so heavy-handed.

Just walking away from someone who commands 60% of the market isn’t something to be done lightly. I’m sure Hachette realizes this.

For Amazon to not carry a major publisher hurts them, too. They are the retailer people turn to because they carry every book. EVERY book. As soon as they become the retailer who carries 3/5 of the traditionally published books, they start to die.

I’m really tired of this Type-A personalities and their pissing contests.Just work it out, guys. Really.

“Is Amazon forcing you to set it at the price they suggested, or just suggesting?”

When Amazon pays 70% for books priced within the range of 2.99-9.99, and only 35% for books outside that range, yes, they effectively are forcing us to set our prices within that range. And for what reason? Not a practical one. There’s no added costs to Amazon selling ebooks outside that approved range. It’s purely a matter of Amazon deciding what your books should be priced at, instead of letting you decide.

Now, of course Amazon has the right to set its own pricing policies. But let’s not pretend it has any good justification for that policy. It doesn’t. It just wants to control the market, rather than allow a free and open market. Do you really support that sort of approach?

Well — it’s because Amazon’s data proves that books earn 16% more money when they’re priced between 2.99 and 9.99. The author/publisher isn’t the only one who gets 16% more — so does Amazon.

It would be nice if they’d lift the restriction, as I absolutely agree that any publisher, indie or Big Five, should be able to stupidly price themselves right out of the market if they choose to. But on the other hand, 16% greater sales is 16% greater sales, so I’m not going to complain too hard on behalf of my checking account.

I’m not objecting to the notion that pricing lower can or will in many/most cases result in more income. I’m just pointing out that this ought to be the author/publisher’s decision, not Amazon’s. Being forced to do the “right thing” is a very dangerous road to go down. Amazon certainly should put out their own empirical findings on the matter, but they should leave the pricing decisions to the author/publishers, who may have a different viewpoint on the matter.

Even Amazon admits that it’s a subjective and generalized thing, and that individual books and authors’ results may vary widely, and that for some books higher prices are quite justifiable. The final decision on that shouldn’t be determined by restraints forced upon these authors and publishers by Amazon. One should be free to experiment and find out for oneself what the optimal price point is for each of your books. It may turn out to be different than what Amazon says it is for the general marketplace, and so even there one may find that Amazon’s price restrictions end up costing some authors real money. 16% is not a huge difference, and individual cases could certainly swing the numbers the other way.

A big part of the problem comes at that lower end of the scale. If Amazon thinks that lower prices are better, why the restrictions on the 0.99-2.99 prices? That has the effect of actually raising prices in many cases.

Even worse, it gravely affects one’s ability to using temporary sales as a means to boost income. Taking a 2.99-4.99 ebook and lowering the price on a sale to 0.99 means cutting in half one’s royalty rates. Bad enough that prices are much lower, it also means that half the (smaller) profits per sale that one generates at the lower price are taken by Amazon. Why should that be?

Another problem with this is that other sites, like Apple, Kobo, B&N, Smashwords, etc., don’t reduce your 70% royalty when you put on a 0.99 sale. But if you try that there, KDP allows Amazon to automatically reduce your Amazon sales price to 0.99 as a competitive measure, which I think would be fine if not for the fact that it will also cut your royalties in half, which is not fine at all. So that really sucks, and undermines the purpose of a sale, and ensures that Amazon will take a big portion (almost 2/3) of the profits generated during a sale.

And then of course there’s the money left on the table by authors who would like to price their work, including especially shorter works, at below 2.99. They can’t do that without facing a stiff penalty. And there’s no business-related reason for that. It’s not even competitive, it’s just that Amazon can get away with it because of their retailing power. There’s no way that forcing authors to price their shorter works in this manner increases their income. It probably hurts almost all authors in that range (and even quite a few who write longer books, but would like to sell them at cheaper prices).

If Hachette would think outside the box, they could just sell Mobi/epup directly from their own website and call it a day. I don’t understand why Publishers don’t make their own “Hulu” (I mention Hulu because the big networks team up for it, not for the streaming aspect of it) to sell books and stop crying.

I’ve asked all my friends and coworkers if the Amazon/Hatchette business has made it onto normal people radar yet (as opposed to publishing industry focused people radar) and the universal response has been “What’s Hachette?”

I had an interesting experience today. I wanted a particular ebook. It was more than I expected to pay for it (not by much, but a couple of dollars). It was a Hachette-published book. I couldn’t do it – I bought a used paper copy of a previous edition instead.

Hachette has my attention now – but in the opposite way to what they want.

I try not to buy print anymore when I can help it (to save apartment space, already overloaded with books), but this is exactly what I do. If the price of the ebook is more than 7 bucks (sometimes more than 5), I get the used one for 1 cent plus 3.99 or 1 buck plus 3.99 if there is a copy if at least good/very good/like new condition. I won’t bother if there are only “acceptable” copies available.

I’ve read a dozen posts by prominent, traditionally-published authors, and they’re say they’re neutral, they say they “love Amazon” and then in the next breath they stick it to Amazon and Indies.

The one thing they all have in common is they’ve forgotten where they came from. They’ve forgotten that they were once unknowns honing their craft in the shadows. They conveniently ignore the fact that were they to emerge today as authors, they’d be staunch defenders of independent writing. The thing that sets you apart is you haven’t forgotten your roots, and full credit to you for that.

Yup. Some really pernicious behavior by some high-profile authors right now. There are a few who immediately bash anything Amazon does, every single time, and then insist they aren’t taking sides. It would be amusing to watch were they not fighting so hard to wreck the marketplace that gives more aspiring writers a leg up.

In two of the cases, I know the authors well enough to think their motivations are entirely selfish and completely financial. These are writers who want to maximize their income, and they don’t want to compete with self-published authors. It’s a disgusting attitude. Hateful.

A query… As a reader who’s been insulted by several Big 5 houses and some minor ones, and by several hundreds of “authors”… why should I care a damn if they sink?

No, don’t give me business or Big ethics. Give me reasons as a reader. For all I care, Hachette should be drawn & quartered. It would stop its practices, depredations and insults, serve as an example and we could get its catalog through whoever got the pieces, likely better (and, if it didn’t… things wouldn’t change that much). But, mainly, an abuser and enabler of abuse would cease to exist. I’d call that a day.

The problem with taking the viewpoint of selflessness is that we are ourselves less selfless than we perceive and those we view as self-interested are more selfless than we perceive. Most of it comes down to people viewing their own values and contributions as well as the structures that underpin them as better than they really are. We assign importance based upon emotion whether it is positive or negative, so the ideals and structures that have helped or harmed us, that have rewarded or punished us, get an emotional adjustment to a value beyond their logical baseline.

This happens all of the time in many professions. Medical people use more healthcare, not because they’re more sick or it improves outcomes, but because their self-worth is tied in with the value of healthcare. Likewise, people who work as wait staff are usually generous tippers. Certainly, there can be other reasons mixed in here, but it isn’t a stretch that people have a tendency to value their in-group inordinately high. One needs only read some of the things Preston has written to understand how emotional his thought process is. He is offended that books might be sold like a commodity and thinks they should be valued at a very high price by his readers. He’s a very successful author and he is heavily invested in the value of his product. I don’t think he’s the only one and it isn’t just him and Patterson, either. It is all of us. Some are better at being objective, but we shouldn’t think for a second that we can view ourselves in a way that is similar to our view of others.

What this means is that it isn’t so straightforward to comprehend where the other side is coming from. They probably do think they are doing what is right for the world. Physical books have been very good to them for most of their long careers. They don’t think eBooks can or should replace physical books. The physical objects matter to them. The editors in traditional publishing also think they have impeccable taste and can’t be beaten when it comes to making sure their books are well structured. They think that without them there is no quality literature just like self-published authors think that it is all about writers and readers.

I’m in the second camp. I think middle men are mostly useless and technology is helping to eliminate most of the layers. However, a lot of writers could use a partner to help them add a semblance of internal consistency to their stories. So, I understand how editors might think they are a necessity. I’m just not convinced that a narrative oriented editor with a liberal arts education is going to have the right kind of mind and skills to help a narrative oriented writer who probably also has a liberal arts education.

The fact of the matter is that we’re all wrong. There is something wrong with everyone’s viewpoint. There are parts of the puzzle that aren’t visible from all perspectives. We let our personal values cloud our reasoning. We just calculate wrong or fail to update our perspective when there is new information. We’re all wrong, and not enough people recognize that the best course forward is to be open minded and be willing to change their conclusions, even if only a tweak here and there.

Generally, I would say the prevailing self-pub perspective is most faulty when it comes to economic analysis of the business of publishing. It is way too simple to say lower price equals higher revenue and trad. publishing is just worried about protecting their best sellers. Windowing comes straight from microeconomic principles, specifically on how a monopolist can maximize revenue by selling a product to different customers for different prices. The basic notion is that selling a premium version to customers with high demand for a product and a less premium version to price sensitive customers will increase revenue and profit. To some degree, this is better for customers and the business, because it provides a transaction for more people than a one product fits all approach.

This shouldn’t be new to anyone. Almost every business provides ways for price insensitive customers to spend more. Publishers have been following this principle by offering the hardback on release and the paperback later. There are two different products with two different prices, but they increase the value of the expensive, higher margin product by making customers wait to get the less expensive product. This also is no great insight, but is an important principle to realize that the situation is more complex than higher revenue on eBooks helps everyone.

The eBook makes something of a mess of the situation. How much do they compete with physical books, which are a valuable part of their business and probably an important part of their value system? The nice thing about hardback and paperback is that they’re differentiated products. There are no issues with customers reacting poorly to price reductions over time, especially at the six month or one year mark when the paperback comes out. This means that pricing of eBooks for trad. publishing is not straightforward. Trad. publishers aren’t completely aligned with Amazon or indies, because their revenue and margins on physical books are better. Discounting and shipping take a big chunk out of Amazon’s income on physical books. Indies make very little on physical books. The profit structure for trad. publishing is different, so they will not agree with Amazon and indies, even if they are doing nothing nefarious. I would go so far as to say their pricing choices don’t conclusively point to anything more than a scheme for profit maximization, which is exactly what we expect in a market economy. I suspect they are protecting physical books, but am not sure why, and can’t be sure that they aren’t right to do what they’re doing.

I’m not suggesting that there aren’t a lot of kind and helpful people in the world, Hugh Howey being one of these people, certainly more than I. However, I do think that values that are deeply connected to our sense of self worth are involved in what we do, even when we think we’re being kind and helpful. People with same values will say you’re a great person and someone with different values might be indifferent or hate you. The point is don’t conflate someone working to make the world as they want it to be a 100% altruistic act or 100% villainous act, ever. When someone questions motive, it doesn’t have to be a suggestion of a slavish devotion to self-interest. The fact is that there are many better ways to be altruistic than to help people who live in the wealthiest country in the world and want the privilege of making a living doing something they’d do for little or no compensation. There’s a personal value serving motivation, and that is worth admitting, though maybe not to a reporter whose motives you don’t understand. Hugh has admitted bias, but not to the reporter, who may have been just looking for an answer of “it makes me feel good to help people who are where I once was.”

I’m also not suggesting that Trad. publishing is right. I think that there have to be better ways for people to sate the need for physical objects associated with the stories they love than a paper print. I also think that the Big5 provide very little value to the market, far less than they take from it. But, those are my values. Even if they’re measured, that measurement is of the pieces I value, and I’m not the good guy or a villain for having my perspective. Undoubtedly, I’m wrong in some dimension regarding what is best for society at large or even myself. However, I will not find that better viewpoint if I only tell myself that I’m on the right side and the other guy’s perspective is that of a mustache twirling villain or a clueless Luddite. I realize that this is a debate going on in a public forum, but I see more certainty in this debate than is healthy in an extremely complex universe of imperfect information.

Well said, Hugh. For those of us who’ve been involved in the business world for 20+ years, we’ve watched other industries endure the same evolution pains. Any attempt at directing the current of the free market always ends in disaster. And that is what the big publishers are attempting. Caught in the middle are authors. I don’t differentiate between indie authors and trad authors. We’re all artists trying to make a living from our hard work. This idea seems to shock a lot of people. Artists, apparently, are meant to starve. As romantic as that notion is, I prefer my cable TV and the occasional steak on the grill. If the publishers won’t help us make that a realilty, we all have the tools to do it on our own. It’s not a matter of rebelling against the corporation. It’s a matter of keeping most of what we earn and making a living.

We’re all artists trying to make a living from our hard work. This idea seems to shock a lot of people. Artists, apparently, are meant to starve.

Artists aren’t meant to do anything. Their collective welfare is a function of how many of them are trying to make a living from their hard work. Consumers don’t want all that art, so they don’t pay enough for all the artists to make a living. Just like the guy who makes widgets. Too many widget makers, and their collective welfare falls. Artists aren’t special.

In the particular case of books, consumers want enough art to support a lot more artists than have historically made a living at it. But it’s not easy to run a marathon with a gorilla on your back, and similarly, it’s tough to make a living when 75% of the wholesale price of your work goes to support a publishing company.

But, suppose the publishers vanished overnight, and every author got 70% of retail, and owned his rights, Now authors are doing well. And in a few weeks the number of authors doubles. And then we hear how hard it is for authors to make a living from their hard work.

The problem here is the large supply of authors. Consumer demand cannot support the numbers of people who want to make a living as authors. With no barriers to entry, supply has no external constraints. With an occupation that is very attractive to many people, many people enter the market.

The problems with publishers are very real. I don’t at all discount that, and there is lots of room for improvement. But they mask the much stronger pressures holding down average earnings for authors. It’s authors themselves. Way too many.

1. It takes more than a few weeks for the vast majority of writers to write a book.

2. It takes a lot more than a few weeks for most writers to learn their craft to the point of being even marginally pubishable. Some will publish before that point, but they will not be taking sales away from writers who know what they’re doing.

3. The field is already vastly more crowded than its economic returns alone would warrant, because many people enter it with ideas of winning fame and prestige rather than money. The fame would not increase if publishers disappeared tomorrow; it might even decrease, because those same publishers put major marketing push into their top authors at the expense of the midlist, and artificially increase the difference between those two classes. People who take up writing with dreams of being the next J. K. Rowling might not bother if they could only dream of being (pardon me, Mine Host, but it’s the name that comes to mind) the next Hugh Howey. Now, Hugh Howey is a very good thing to be; but it does not (yet) have the glamour that attaches to the handful of world-famous bestselling names.

The problem here is the large supply of authors. Consumer demand cannot support the numbers of people who want to make a living as authors. With no barriers to entry, supply has no external constraints.

But we are already in that position. Getting rid of the unnecessary middleman would not make everyone and his dog able to self-publish, because they are able to do that already. What it would do is make a lot more of the reader’s money available to pay the good writers.

1. OK. I employed hyperbole for effect in saying authors double in a few weeks. Maybe the percentage increase is 101.86%. But when pay increases, it draws new entrants. Maybe it brings novels out of the drawer in a few weeks, maybe they are written in 274 days. In any case, it pulls new entrants into the market. We saw this with KDP.

2a. It doesn’t matter how long it takes an author to learn his craft. All that matters is that he hits the KDP upload button. That makes him an author. There is no barrier to entry. Now he can complain.

2b. Who cares if new entrants are taking sales from other authors? That isn’t necessary to be an author. The population of authors increases, and then they complain that they can’t earn a living.

3. I agree the field is vastly more crowded today than econ returns would justify. That’s why authors collectively don’t make a living from their hard work.

4. I mentioned publishers disappearing tomorrow to illustrate that total consumer spending is insufficient to provide a living for all the people who want to be authors. Maybe they disappear in eleven days or eleven months. Choose whatever percentage split you want from publishers. Invoke the Howey system. Change royalties. Revert rights. Giv eout elbow patches. Do anything. There isn’t enough consumer spending to support the population of authors.

5. I agree we are already in a position of having too many authors for them to make a living from their hard work. And I agree getting rid of middlemen would not make anyone and his dog self-publish. But the increased payment to authors resulting from disintermediation of publishers would attract more people to writing. That would then lower average returns, and authors would collectively not be making a living from their hard work. Back in the same collective position

6. I agree any kind of reform of publishing terms would flow to the good writers. Good writers are a subset of all writers. So some would benefit, and more would not. In the end, we are always in a situation where we can complain that writers cannot make a living their hard work.

This is similar to the economic problem of the fishery where prices fall to average costs and nobody makes money. I realize we are not dealing with fish, so it is not identical. I also realize there are no boats, so it’s not identical. And I realize average costs are lower with books so it’s not identical.

But the lesson from the fishery is that unrestricted entry without any corresponding increase in demand leads to very poor collective income for fishermen. Then they get to complain they can’t make a living from their hard work.

Hugh – Great post, but to answer your question: A lot of indie writers are tired of being crapped on by both the publishers and their trad authors. There is an inbred elitism with tradpub. What you are seeing is the proletariat casting down the bourgeoisie and its lapdogs – those same lapdogs who growl at and bite us because we aren’t living behind their gardened walls. So when you ask why a lot of indies say “let them price themselves out of the market”, it’s because they’re tired of being treated as second-class citizens by the very court jesters we’re trying to help. We consider tradpub authors our equals, but the reverse is typically not true. Why, then, should indies care so much about elitists who refuse to acknowledge us, and generally claim that they don’t want our help? If homeless people spat on me every time I gave them money, you can be damn well sure I’d stop doing it.

I think she means, what really happens if the lights go out as in the grid fails. Where will eBooks be? They are pixels on a screen in an eReader. Historically, classics have been printed and reprinted and preserved in libraries and archives. How do we preserve eBooks for posterity? A Carrington Event that took down the electricity grid could throw everything into chaos for six months to a year. Unless there are print copies of a work, a lot could be lost when electronics failed. Electronic apocalypse…

Well, I don’t know what to tell you. Paper is no safeguard against disaster, either. If the Library of Alexandria hadn’t been burned, we’d probably be about 2000 years ahead of our current state of knowledge and achievement right now. Sometimes disasters to the sum of human worth occur. New culture develops and new classics are made.

Don’t overestimate the importance of the Library of Alexandria. Consider, any book that was totally lost in the destruction of the Library was lost because there were no copies anywhere else. Which means that nobody was actually using the book and learning from it; it was just sitting in the stacks, listed in the catalogue, but not being of any use to anybody. That was not contributing to human knowledge.

Worse, the books at Alexandria were written on papyrus, which is not a long-lasting medium except under perfect conditions. After a century or two, the scroll either becomes mushy (too much moisture) and sticks together, or it becomes brittle (too dry). Either way, it can no longer be unrolled. That’s why, in the Roman Empire, parchment was preferred for any document that had to be preserved for a long time.

In fact – not many people know this, and I think it should be more widely known – the Library seems to have just withered away because it lost funding under Roman rule. The fire that most people think of when you mention the burning of the Great Library was the fire at the Serapeum in Hypatia’s time. But we know from the reports of historians who lived in that era that there was no longer a library at that location. One historian mentions that there used to be a library in the building.

Michael Flynn has written a fascinating and scholarly account of the whole business, which you can read online here:

There’s another rationale for self-pubbers to want to see prices even of traditionally published books come down – and it’s not a selfless one. As it stands now, there’s still a widespread assumption that low-priced books are of lower quality, and that self-published books are of lower quality (and status). The price differential between big selling traditionally published books and lower priced self-published books reinforces it. The effect is that many people still won’t take a chance on low-priced or self-published books.

So many self-pubbers, I think, intuitively sense that if that price differential were considerably lessened, the status differential, and thus the buying reluctance would also lessen. The result would be higher acceptance of lower priced self-published ebooks, and thus more sales of these. So in the larger picture, lowering the prices on traditionally published books could actually increase the sales of lower priced self-published books. I’m not entirely sure if it works that way, but I suspect it does, and it certainly would help explain why self-pubbers would like to see lower prices even on traditionally published books.

As it stands now, there’s still a widespread assumption that low-priced books are of lower quality…

This was true, but I’m not sure it is any more. Most of the great classics of the past are now available for 99 cents or $1.99 on Amazon. And I see current trad pub bestsellers on sale for $1.99 all the time. I doubt that price is the clear signal that it was at the beginning of KDP.

I think the situation is changing, but it still remains significantly true for a significant portion of the marketplace. And that’s why I think self-pubbers are not just rooting for lower prices in traditional publishing, but for defectors from traditional publishing. The more of that there is, the more credibility self-pubbing and lower pricing gains. Whether or not that actually translates into higher income, I’m not so sure. But it does translate into status gains. And aside from money, status is probably the next biggest motivator in most human beings. In fact, I would not be surprised if quite a few self-pubbers would trade some portion of their income for increased status and legitimacy in the publishing world. How much would be an interesting psychological question.

The status factor shouldn’t be overlooked. It not only affects writers and publishers, it also affects readers. There are plenty of readers still who buy books out of a desire for status. They want to buy established, high-status writers, and are willing to pay extra for that. In fact, buying cheap self-pubbed books may actually lower their own sense of status and self-worth. Traditional publishing has always relied upon the psychological status of a certain kind of book and pricing model that takes advantage of this sort of consumer behavior. It’s hardly unique to the publishing industry.

There’s another kind of reader, however, who isn’t motivated so much by these status values. Or, they value a different kind of status as a savvy discoverer of new material, or a bargain hunter (who relishes the status of finding great deals). And then, there’s the readers who just enjoy reading, as much as they can afford, and like low prices because it lets them read more within the same budget (or it lets them justify spending more overall because of the increased enjoyment it brings).

It’s important to understand all these different kinds of readers and their motivations. And don’t underestimate how status figures into the equation.

That’s only one kind of “status” buying. When I was younger, my particular set’s status buying consisted of obscure literary books that one could make sure people saw one carrying around to advertise just how cool and hip we were. Status-buying includes any kind of buying that enhances one’s self-image, and its reflection among one’s friends. There’s a whole lot of books that get bought and never much read, mostly because of the status-feelings we get just from owning them. Amazon taps into that quite well, by encouraging people to buy more books than they can actually read. I’m guilty of that as well.

What you say is true; but it doesn’t help much to carry around a prestige-conferring book unless you are seen to carry it around. Having it on your Kindle or phone is not a good way of showing off.

The ‘savvy discoverer of new material’ I grant you; but such people tend to gravitate away from works by major publishers, and prefer to buy from obscure sources. I have known extreme cases among music fans: such as the fellow I once knew who had formerly been a fan of Skinny Puppy (hardly a mainstream taste in itself), but had dropped them when they ‘sold out’. By his definition, ‘selling out’ meant that they began to have a cover charge at their gigs.

Very well said, Hugh. I am 100% in agreement. Yes, it would be great for *me* if Hachette and the rest of the Big Five continued to price sky-high. But I am not the only writer on the planet, and I feel for those authors who are screwed by the bad decisions of their publishers. It’s awful for them, and I want them to be able to earn a good living and to not fear that they’ll be denied another contract because of “poor sales” due to short-sighted pricing.

We’re all authors. We’re all in this together. I, too, am a little grossed out by how many people are only considering their own interests and not giving a rat’s ass about Hachette’s many affected midlisters.

Amazon explained that midlist authors benefit from the increased sales of lower priced books. A $14.99 ebook in the KDP program has a 35% royalty rate. That’s $5.25 for the publisher and $9.74 for Amazon. A $9.99 ebook has a royalty rate of 70%. That’s $6.99 for the publisher and $3.0 for Amazon, which seems like a poor deal for the retailer (a loss of $6.74 on every book sold at $9.99 compared to $14.99), but $9.99 ebooks outsell $14.99 ebooks by a ratio of 1.74: 1. For every 1.74 ebooks sold, the retailer makes $5.22, $12.17 goes to the publisher and there’s a saving of $5/ebook for the reader.

By offering the higher royalty rate on the $9.99 ebook, Amazon loses $4.52 ($9.74 earned on a $14.99 ebook with a 35% royalty rate – $5.22), and Hachette gains $6.92 ($12.17 – $5.25). With a 70% royalty rate on a $14.99 ebook, the publisher receives $10.50, which is still less than the amount received ($12.16) from the sale of 1.74 ebooks priced at $9.99 with the same 70% royalty rate. The publisher makes less, the retailer makes less and the reader pays more! Also, with the 70% royalty rate, Amazon only receives $4.49 on an ebook priced at $14.99, so cannot reduce the price to $9.99 to save the reader $5. Despite knowing all this, Hachette still will not agree to Amazon’s terms.

The thing is, Hachette is not getting 35% of list on those $14.99 ebooks. It’s getting the full 70%, because it has a different contract with Amazon than you and me and Hugh. (This is why Hachette is trumpeting its allegation that Amazon wants to cut it back to 50% – which is still a better deal than the rest of us get for ebooks at that price.)

Where Hachette is losing out is simply on volume: far fewer people will pay $14.99 for an ebook than $9.99 or $4.99.

50% royalties on a $14.99 ebook would give Hachette and Amazon $7.50 (give or take a cent).

At the 50% royalty rate, Amazon could afford to reduce their take to $3 (which is the amount they receive on a $9.99 ebook with 70% royalties). That would save the reader $4.50, increase the number of sales and produce more revenue for both the publisher and the retailer.

But Hachette doesn’t want that. What Hachette wants is that when Hachette list-prices an ebook at $14.99, it should by gum sell for $14.99, and not a penny less.

Which is to say that Hachette wants to shoot itself in the foot until the bullets run out. It should be listening to its retailers when they say that its list prices are too high and are turning off consumers. But Hachette, like most big publishers, seems entirely oblivious to consumers, and insists on pooh-poohing its biggest retailer’s data, despite having no comparable data of its own.

When PCs replaced mainframe computers, the mainframe companies lost their shirts, and they were run by the best, the brightest, the most talented engineers and the most conscientious and savvy business people. Many of them were better educated and more skilled than their counterparts in the PC business, and you could feel that it was a tragedy that they had to fall.

With traditional publishers, on the other hand, I just have to wonder how they stayed in business this long, and how they tie their ties each morning without strangling themselves. From where I stand, it looks as if they can’t read the writing on the wall; can’t even see it; deny that there is any writing, even when their faces are pressed right up against the wet ink.

Hugh, I would like to point out that not everybody holding a phone in a bookstore is checking the PRICE of a book that they’re looking at. They might very well be checking amazon reviews or goodreads to determine the QUALITY of the book, at least as determined by peer reviews. This is one of Amazon’s advantages that bookstores lack, and don’t even seem to understand, or care to understand. It’s not just price.

If you’re going to open a bookstore, how are you going to communicate quality, or suitability to taste, beyond the hardly disinterested cover blurbs that books carry?

Yes indeed. I check Amazon reviews of books in not only the bookstore, but also the library. Ebooks are easy to buy and store. With paper books, you need to haul them home, find space for them, and dust them. No point in buying a book if reviews mention a pet peeve.

In the bookstore, looking up a book on my phone often ensures that I buy the book.

I commented on a post on TPV yesterday, and said that I’ve made all the comments about this Amazon/Hachette situation that I’m going to make. I’ve blogged, and preached, and commented, and gotten outraged at the treatment that we indie authors have received.

I care about other authors, even stinking Preston and I-can’t-write-a-sentence Patterson. I want us all to be able to sell books. Other authors are not, and have never been, my competition. They’re my colleagues, and we all are passionate about what we write (except Patterson – I don’t think he’s written anything on his own since 1990… ).

I care about Hachette charging so much for their product that they’re pricing themselves out of business. I don’t care about that because of Hachette, but because of the authors that are signed with them. It upsets me that some of them can’t see that they’re wasting their talents by giving away their rights for a meager, non-life-sustaining pittance.

As a reader, I will buy cheaper ebooks. $7.99 is about the most I will pay for any ebook. I get frustrated that Hachette doesn’t understand that.

So, I said I was done. I wasn’t going to waste any more breath on it, and I was going back to what I should be doing – writing.

Then, here comes Hugh. The Jiminy Cricket of the story, making me feel guilty for giving up. He’s my conscience, and he’s quite clear…authors should be fighting FOR other authors.

Every point he said in the post above is true. Every word is correct, and every idea should be shared among authors.

Maybe you’ve made your mind up, and closed off other opinions. That’s fine. Back away, and go back to your lives.

I’ll stand with Mr. Howey, and fight for my fellow authors. Even you, the one that’s already made up your mind.

I am tired of the publishing side of the table calling Amazon the Evil Empire. An old friend of mine is an author tied in to a publisher and he asked me why I support “the evil empire”. I told him that one reason is that I take offense to millionaire authors calling me cheap for not wanting to pay more. More important, every time he calls Amazon the Evil Empire, he is talking to me, a person who shops at Amazon and is grateful for its existence. He is calling me a Devil worshiper, and I am really friggen tired of that.

‘Evil Empire,’ eh? Let me see; we had another one of those not too many years ago.

In that Evil Empire, you could not publish any book without the approval of the government’s censors, and going through the government’s official printing press. If you printed a book outside those channels – even if you made unauthorized photocopies of your own writing – you could be sent to prison, often for life. You could even go to prison retroactively, because some Party official decided that your ideas were no longer approved, and were criminal after all.

In this Evil Empire, just about anyone can publish just about anything they like, without so much as a publisher’s slush reader standing in the way. (The exceptions are mostly due to copyright and obscenity laws, which Amazon does not control.) And if you choose not to go through Amazon, they will do nothing to prevent you from selling your book anywhere and everywhere you can arrange, or even giving it away if you wish. Jeff Bezos doesn’t even own a prison, unless you are such a wilting flower that you cannot tell the difference between working in a warehouse and being sent to the Gulag Archipelago.

But hey, let’s call both these things by the same name, ’cos they are totally identical, amirite?

Nice comparison. But one minor correction: even if you choose to go through Amazon, as long as you do not enroll in KDP select, they still do nothing to prevent you from selling your book anywhere and everywhere else that you can

Exactly, Kathy. There are some who try to make the passion with which we defend Amazon some kind of cult-like thing. But it wouldn’t be necessary for us to vociferously defend the company without so many people out there comparing Bezos to the devil and Amazon to pure evil.

What they want to be able to do is both use inflammatory language to tear down while shaming those who attempt to build back up. We’re lunatics for being positive, but they are thoughtful, sincere, and intellectual for being Jeremiads.

Not only is it an ugly scheme, it’s hypocritical and dishonest. Huggers gonna hug, I say.

I jumped on it when Amazon offered matchbook where i could “sell” my ebook at 1/2 price to free to a verified purchaser of the print edition. It’s retroactive for all verified purchasers. I chose to offer my match-ebook for free. Percentage wise, there have been very few people who have taken advantage of this offer. So while I think it’s a great idea in theory, my experience is not so positive.

My stance: if someone buys the print version of my book, I’ll give them the ebook free.

Truth is, on the print version I make enough profit per book that it easily covers any “loss” I might suffer from giving away the ebook. And giving away that ebook for free? Guess what people: that’s a business tax deduction. So, technically, you don’t really lose money on it.

(Right now my only problem is I don’t have a print version because the current cover image isn’t large enough for printing. As I’ve never been able to get a response out of decent illustrators, I’ve turned to taking the “indie” label to a whole new level and I’ve been trying to teach myself to paint so I can try doing my own covers. Gonna be a while…)

This is kind of a far out there perspective, but in the new age metaphysical field, it is widely suggested that there are two tracks of human evolution. One is the track of service-to-others and the other is the track of service-to-self. Interestingly, the path of service-to-self can only take a human soul so far before the limitations inherent in that path prevent any further spiritual evolution. This is because they cannot cooperate and so they end up tearing each other down. It is only by developing our ability to cooperate that we can go even higher. As a result every being who follows the service-to-self path must and will at some point start over on the service-to-others path.

This planet has both paths happening simultaneously, which actually makes it a good planet to evolve on since we evolve more when faced with difficult challenges. And it is a difficult challenge for a service-to-others person to deal with a service-to-self person. We just don’t understand them or their motivations. Unfortunately, this makes us more vulnerable to their manipulations and mistreatment. Psychologists have pointed out how sociopaths and narcissists often target empathetic people. This is one example of how this plays out.

Service-to-others people probably need to learn to recognize and accept that some people have fundamentally different motivations than their own. The best protection against a service-to-self person is to see clearly what is happening and then simply stand firm and set clear boundaries. There is no contradiction between serving others and taking steps to protect yourself and the people and values you care about. It does not help anyone to allow someone else to do harm or incorrectly criticize and even manipulate others.

I hold everything lightly, but I do find this whole idea of two tracks of evolution intriguing. It does possibly explain why it is so hard for me sometimes to understand someone else’s perspective and motivations.

I think it’s completely wrong when people interpret this dispute as Amazon trying to “force” publishers to accept lower prices. That’s not what is going on. It is publishers that are trying to force Amazon into acting against it’s own self interests. They are in effect, demanding that Amazon sell them rope (at a discount) that they can use to hang it. And when Amazon refused, rather than negotiate, they rushed out to try to blackmail Amazon with threats of government action and a misleading media smear campaign.

We know exactly what big publishers are planning because of the DOJ lawsuit (including their own emails). They engaged in an illegal conspiracy to force Amazon into an agency model so it couldn’t discount prices and offer a competitive advantage to other digital retailers. This is not simply about higher prices, but “fixed” prices.

Originally, the publishers illegally conspired to force Apple to accept the agency model as a condition of selling books on it’s new iBooks store. (I personally don’t believe Apple should have been punished for caving into this conspiracy, but that’s another subject.) The iBooks store couldn’t compete with Amazon without the big five’s books. The publishers used their leverage with Apple to attack Amazon. Steve Jobs knew the publishers wanted to overprice books. He knew that the prices they were demanding would lead to lower sales. And he knew damn well the reason publishers wanted high prices was to delay the transition from print. However, if the deal with Apple also forced Amazon to raise prices and prevented it from discounting, then Apple would be able to easily compete with Amazon. And, in fact, it would have a huge advantage because of it’s device base and walled garden. Amazon’s only advantage over Apple would have been to offer books at a discount. If that was taken away, Amazon was likely to lose a ton of market share. Which is exactly what the publishers wanted, a gutted and weakened Amazon.

Thanks to the DOJ lawsuit, Amazon gained some time in it’s battle against Apple’s iBooks store (and Google, and others ebook stores in the wings). Now Hachette and the other big publishers are regrouping to legally collude rather than illegally conspire. The first step in that collusion was for Hachette to refuse to renew it’s deal with Amazon. This would put it in a position to wait until the other publishers could do the same and then they could try again to force Amazon into an agency model with fixed prices. (Presumably this time they would avoid the wine fueled meetings over lunch giggling about how Amazon was doomed so they don’t cross the line into illegal conspiracy.) After Hachette allowed it’s deal with Amazon to lapse, they figured they could sit back and then negotiate with Amazon around the same time as the other publishers and they would all just “happen” to agree that Amazon must adopt the agency model of fixed, non-competitive prices so Apple and Google could eat into it’s market share.

The problem is, Hachette assumed that Amazon would just sit back and do nothing until they were ready to spring their trap. In particular, Hachette assumed Amazon would continue to offer it all the perks and special treatment it has previously gotten as a part of it’s old deal with Amazon. Nice things like pre-order buttons, overstocking books, discounting retail prices while paying full wholesale prices. Because, after all, Amazon made Hachette a ton of money by running it’s bookstore so well, why shouldn’t Amazon continue to work hard for Hachette until Hachette was ready to stab it in the back?

Amazon has no legal, moral or logical obligation to offer Hachette great perks while Hachette figures out how to undercut it. Without a deal, Amazon continues to sell Hachette books, buying them when people order them and selling them for what Hachette says is a fair retail price. Amazon not only doesn’t need to go beyond that, it would be kind of crazy for it to.
The big publishers ultimate goal is to delay the transition from print (which is also not in Amazon’s interests) and to force Amazon to accept a lower market share by eliminating it’s ability to compete. I applaud Amazon for taking reasonable (and frankly moderate) steps to protect itself.

Now, what side should self-publishers be on in this war? Let’s ask the basic questions. What has Apple done for self-publishers? What has Google done? What has Amazon done? Who is working the hardest to help self-publishers? Who has a long term interest in helping self-publishers? Who is making the most money for self-publishers?

I’m a huge Apple fan, but frankly, they don’t care that much about self-publishing. Their efforts in the past have been at best half-hearted. They are more interested in making deals with the big five (and other big media companies). And they are more interested in taking market share from Amazon, whether it hurts self-publishers or not.

Amazon not only has a great history of being good to self-publishers, but clearly in it’s battle for market share, it has long term interests in keeping self-publishers happy. In fact, self-publishers are shaping up to be it’s primary competitive advantage in a battle where Apple and Google should have more resources to win.

I also believe that if the big five win the battle and force Amazon into an agency model to lower Amazon’s market share and marginalize it, their next logical target would be to attack self-publishing by finding ways to bury it in ghettos that are hard to find. One way would be for each of the big five (perhaps merging into a big three) to have their own ebooks stores (offering the exact same prices as Apple and Amazon) where they only offer their own books and self-publishers be damned. They could also demand that Apple and Amazon not recommend non-Hachette books on pages selling Hachette books. They can try again to force a DRM scheme to lock people into formats that self-publishers can’t easily access.
I think self-publishers should not take Amazon for granted. It is not digital destiny that the most successful online retailer adopted a model friendly to the independent writer. It could easily have gone another way, particularly if the big five had moved faster. Yes, thanks to the internet, writers will always be able to publish their own books, but there is no guarantee readers will be able to find them easily and pay for them easily. If fifteen years ago Amazon had charged everyone $100 per year to put a book up for sale, and only allowed a 25% cut of the sale price, and insisted that all ebooks sell for $9.99, most indy writers would have jumped at the chance and considered it fair.

If the big publishers succeed in cutting Amazon’s market share, and building strong relationships with other ebook retailers (or successful create their own), the next step could be simply taking Amazon out of the game completely by refusing to allow it to sell their ebooks. Readers would be forced to go to other sites for big name authors, and indies could lose eyeballs quickly. I think this scenario is much more likely than Amazon becoming so big it decides to turn on self-publishers.

Likewise, no, it is not in the interests of self-publishers to sit on the sidelines while the big five raise prices to slow ebook adoption, force price fixing to kill Amazon’s market share, and build support for government action to “save” literature. (It’s not hard to imagine a congressional bill to prop up “literature” by forcing price controls on books will also have some “anti-porn protections” forcing censorship on self-publishers or fees to have books rated to “protect children.”)

While Hachette seemed to think it’s media smear campaign would force Amazon to quickly back down, it seems clear Amazon is gearing up for a long term battle. Self-publishers will likely benefit from a prolonged battle between big publishers and Amazon. Amazon continuing to sell books from the big five, but not offering them special perks, is a win-win for self-publishers. Publishers best selling books are still on display, still over priced, but still likely to be cheaper on Amazon than elsewhere. Self-published books will continue to look like a bargain in comparison. Big publishers will continue to scramble trying to figure out a strategy. So far, their media campaign against Amazon seems to be doing more to publicize the benefits of self-publishing than build a groundswell of support for government action. Big names writers are going to be pissed their sales are down for due to a losing battle and might also switch to self-publishing. Big publishers might try to swoop in and buy up important self-published writers (who also might refuse). Amazon will be encouraged to offer more perks to keep self-publishers on their side. Apple and Google might finally realize the importance of self-publishing and start to offer enhanced perks of their own.

Ultimately, this is about readers and growing the audience for fiction. Amazon has a great history of working to build readership and that is why they prefer reasonable prices. Big publishers have a frightening history of not caring as readership declines and that’s why they don’t care if they drive off readers with high prices. Why should we care? Because happy readers are what puts money into writer’s pockets so we can continue to do what we love.

Apple recognizes that how their iBookstore works is pretty anemic compared to the competition. They are making a concerted effort to change how the iBookstore works and make ebooks more discoverable. The word in the back alley (because it isn’t on the streets, yet) is Apple is preparing to roll out a major revamping of the iBookstore in the near future.

Now, as to WHEN this will happen, that wasn’t mentioned. I would be very surprised if it was rolled out with the new Mac OS, Yosemite, and iOS 8 next month. I’d be happy if it was introduced for the holiday season, but I suspect we won’t really see the changes until spring.

If the BookLamp technology Apple acquired works as well as I hope it will, book recommendations to readers will no longer be bound to the bestsellers lists or ‘other books customers also bought.’ Rather than saying, “Everyone seems to be buying this book, maybe you’ll like it, too.” BookLamp will say, “You seem to like books that have X and Y. Here are some books that are pretty similar…”

The BookLamp technology could be a real boon for undiscovered writers.

I’m surprised by the comments that essentially say, “Why should we complain/fight the higher prices?” Several times in the recent past, companies and industries have been legally slapped for driving up prices with no just cause, gouging consumers while making themselves rich. A monopoly is a monopoly, whether it’s one company doing it all, or several actively colluding or simply have an “unspoken agreement” to act in a certain way. I saw it mentioned somewhere else that not so long ago one of the publishers was hindered by the others when they tried to lower their prices. The way indie authors get treated, per Hugh’s own experiences, at publishing events is further evidence. They don’t want anyone to find a new or better way of doing business, they don’t want to share the pie, they want it all and want to dictate every aspect of it.
As consumers or creators, we have the right, and maybe even the duty, to question when we see someone else profiting so greatly off our backs, while they fight to give us little in return. An author who has poured hours and hours of their own time and energy into a creation, deserves better than the pittance and the casual disregard that most of these publishers seem to hand out. They deserve a voice in the process that benefits the most from their creativity.
If you don’t speak up, you’re telling them it’s okay to keep gouging you. Even one of the core tenets of the USA is in being “For the People”. It was one of the reasons the colonies rebelled against the British, the unfair taxation levied on them which from my reading of history was largely just to make money for the British and companies like the East India Trading Company.
We question where our tax money goes and how our governments use it, we hold them responsible for it, why wouldn’t we do the same for the companies that provide the products and services we purchase?
And so what if Amazon someday changes their terms and tries to rip off authors. With this little thing called the internet, it wouldn’t take much for someone else to step up and create a more generous business model while offering a mobile app and e-publishing service. Geez, 10 year old kids are designing and building apps now. Print on demand would be harder but not impossible either.

To me the entire thing should be very simple. Hachette tells Amazon how much Amazon can buy a book for. Doesn’t matter if it is a hardcover, paperback, or an eBook. Hachette sells the item to Amazon. Amazon now sells the item to the consumer. Hachette has gotten their money so it shouldn’t matter if Amazon marks the product up, down, or sells it at cost or below cost.

If Hachette wants to sell to Amazon at a price that Amazon won’t pay then Amazon doesn’t buy it and can’t sell it. Simple. As. That. I don’t think the Publisher should have any right to set the price that the retailer sells the product at.

The pricing agreement is too simple; it allows the retailer to effectively price the ebook at a level that it will not sell, e.g. publisher asks for $10.50/download; the retailer could set the price of the download to the customer at $29.99.

Then they can do that by not carrying the product. They don’t need to pretend to carry it and then ask a ridiculous price for it. That’s just passive-aggressive, and I can’t imagine it would sit well with the retailer’s customers.

I’ve bought books through Amazon for years – partly because of the variety and partly because of the price. Even factoring in the cost of postage and handling from the US to Australia, it was /cheaper/ for me to buy on Amazon than to go to a bookstore here and buy a book.
The advent of the Kindle and cheap ebooks made it possible for me to take a punt on an unknown author, which is exactly what Hugh was talking about.
Now that my budget is very, very tight, ebooks [especially by Indies] allow me to keep reading new fiction instead of re-reading my own library of books for the umpteenth time. So cost can either encourage or discourage reading, and I’m with Hugh, we should all be encouraging people to read.
After all, the more people there are in the reading pool, the bigger the pie for all of us writers to share. Operative word being ‘share’.

Well said. We all know the feeling of reading a book, liking it, and wanting to find more like it. What is wonderful about Amazon is that it is instant…. In the old days we would have to go to the library or bookstores to find more, and by the time we get there we might have lost interest, but now we can buy common titles right away.
And another great thing about Amazon is the low prices, I have about 70 books I found on sale for 99 cents, I have no time to read them but i bought them on sale and will get to them someday. In the old world, I might have a few books on a shelf waiting to read but for the same cost now i have a library waiting for me… No more worrying about spending 15 bucks on a book I might want ot read, it’s 99 cents, go ahead and buy it….

I have looked at all the sides of the new publishing model and found only one problem with the new ease of publishing, but I see it with comedy rather than anger. In the old days the world was full of shit writers who would walk around with thier pile of rejection letters talking about how the publishers kept them from success. Angry little men in tweed coats. Today these shit writes can publish all they want, but they still complain. Wearing the same tweed coats, they now complain Amazon isn’t promoting thier book enough, lol.
I have always been a big believer in ‘if someone does something FOR you, shut up’. For example, none of use pay for facebook so we have no right to complain how they do things, we don’t have to be there… It is the same for publishing, we can publish for free, so we do NOT have any right to tell Amazon what we want, if we want thier free service, we follow thier rules. End of story…

Both of these companies make a ton of money…who cares, most of the authors who are with Amazon are the self-published variety and really don’t have much originality in their work for me to care, and Hachette has a lot of commercial writers that I don’t read. But they do have their gems that have been polished and the writing is gorgeous. Bottom line–keep publishing those and I will read–I could really care less what Amazon sells their ebooks for, if the book is at any good, I will plop $50 down for it.

That’s what happened to the first Robert Galbraith book, isn’t it? It sold like hotcakes as soon as it came out because it was a polished gem, and even a hard cover didn’t cost $50. Or is memory serving me wrong?

Another wonderful psychological advantage to an ebook is that you are never daunted by the physical reality of how much more there is to be read in a long book. Pick up something like ‘War and Peace’ and it is hard not to be a little unsure if you are up to the task. Pick up the ebook and not only do your arms not get tired, but your sense of how massive a book it is falls away and you just concentrate on the reading. This worked for me at any rate. Also not sure I could have got through all of George RR Martin if I had to do it on the small print of the overly thick and dense trade paperbacks. I started listing my books read before ebooks came along and I used Goodreads to sort my read books by length and noticed that a good number of the longest books had been read since buying a Kindle. This includes writers such as Dan Simmons (one of the infamous 900).

I bought one of George R. R. Martin’s books at an airport bookshop (remember those?) for the long flight from Montreal to Calgary. I did not notice the weight of the book because I am built like two separate oxen, but I think the plane had trouble getting off the ground.

Thanks for your thoughts. A rewarding read. As a self-published author on Amazon I feel sorry for all the authors in the world who have to take sides and are bullied into signing petitions for their publishers. I think it is unethnical of publishers who demand this. It undermines the basics of freedom of speech.